The Impact of Apartment Turnover
Apartment turnover has one of the most significant impacts to your financial performance. When you consider the lost revenue from vacancy loss combined with the expense to turn and remarket the apartment, the impact to the bottom line increases with every turn. While it is equally important to focus on leasing activity, you cannot lose site of the impact of apartment turnover on your budgets and maintenance technicians.
The cost of turning a unit in 2021 could be higher than the average cost from prior years as gas and the cost for materials are skyrocketing. With increased pressure on budgeted turn expenses comes increased pressure on your maintenance team. While the financial impact is cause for concern on its own, the workload on the maintenance team members to turn the units, especially during peak leasing cycles, can be significant.
How many times have preventative maintenance items been delayed or overlooked due to the maintenance team being consumed with getting units ready or as a result of budget concerns? Delaying preventative maintenance has a higher cost down the road.
While move-outs are inevitable, there are ways to minimize the vacancy loss from apartment turnover. Operators can take a variety of measures to lessen the burden on your team members and limit the impact on your bottom line.
Taking a proactive approach to managing turns and having an efficient make-ready process will save you time and money. Here are 5 best practices to improve your apartment turnover rate.
1. Proactive Management Has to Include Maintenance
Budgets typically align with historical leasing cycles, which are helpful for staff and budget planning purposes. Your properties are unique. Instead of solely relying on regional historic leasing cycles, you need to track each property’s projected occupancy rate and future lease expirations to forecast appropriately for apartment turnovers.
Your maintenance team needs as much notice as possible about any potential increase in expected move-outs. Sharing the number of expiring leases for the rest of the year and expected renewal rates with your maintenance team can help them plan spend and staffing appropriately.
With property management software, you can provide them access to information to help them understand the renewal value. Every renewal means there is one less unit to turn, which will impact how maintenance team members engage with current renters in the best way.
Your maintenance supervisor is responsible for staying within the allotted maintenance and turn budget, and he or she may already proactively work with vendors to get products ordered and tasks scheduled in advance. If they can adjust the spend and use of vendors weeks or months in advance, they will manage the budget more effectively.
2. Create Make-Ready Work Orders
Every property has some form of make-ready board. Whether you’re using a whiteboard, spreadsheet or software, you have a way to communicate upcoming turnover tasks to your maintenance technicians. But what if your make-ready board allowed you to maximize your time?
We all know that time is money. Leveraging property management software to manage the unit turns for upcoming notice to vacates proactively saves time and makes sure that no units slip off the radar.
As mentioned above, visibility is crucial, but it is not the only way to help your team manage the process. Most maintenance teams are limited in size and rely on outside contractors to prepare units for a new renter. Managing the contractors is one area that turn management software can ease some of the burdens and decrease the time to get the unit ready.
Regardless of how clean the former resident thinks they left their apartment, you know that you must send in your housekeeper or cleaning contractor, so why not automate the process? With make-ready work orders, your team no longer has to schedule maintenance after they walk the units. Routine tasks can already be scheduled in property management software. Not only does this save time, but it ensures no tasks slip through the cracks and cause delayed move-in dates and vacancy loss.
3. Designate Specific Move Out Dates
Taking a strategic approach to apartment turnovers can help ensure your units aren’t vacant for long periods and that the workload is manageable for the staff. Management companies have been moving away from the old concept of ending their leases on the last day of the month, which would often overload the maintenance teams the first week of the following month.
When there are more units to turn than there is time in the day, they (naturally) don’t get turned, increasing vacancy loss. More and more management companies have lease expirations spread throughout the month—some schedule leases to expire on Saturday or Sunday. Considering the most desirable days for a new move-in are Friday, Saturday and Sunday, your team has plenty of time to complete the turn.
If you are using property management software with turn management capabilities, the office staff can help maintenance get a jump start on even the toughest of turns while they were doing the final walk-through with a resident upon move-out.
*Keep in mind that you should document this in the lease if you choose to designate specific move-out dates each month.
4. Go Green to Cut Costs
Apartment turnovers are a great time to complete budgeted renovations or implement green initiatives.
With the number of energy-saving products and appliances on the market, consider ways you can go green while saving money in perpetuity. If going green is something you are looking to evaluate so that you can budget for an entire project in the future, consider selecting a handful of units that are not preleased to install eco-friendly products. Some eco-friendly products, like LED lightbulbs, are simple to add to your maintenance budget for apartment turnovers.
When your team is optimized for efficiency and expense management, testing the water for the handful of units selected might be in your budget after all. Once you see the results in net rental revenue for green apartments, you have the justification for the spending in next year’s budget. Oh, and don’t forget the net rental improvement and increased asset value you will see!
5. Give Your Team Some Time for Last-Minute Issues
Walking the apartment prior to the resident moving out will help you identify the work and materials needed in advance. When your team is overloaded, walking the unit in advance often gets deprioritized.
If you have to do a final walk-through only hours before a resident moves in, you may not have time to fix any issues that come up, causing a poor first experience for new residents. When the team and contractors are rushed, there is a potential for a decline in their work quality. The move-in experience for new renters has proven to be a significant factor in lease renewal. Empowering your team will ensure an excellent experience for your renters, too.
Your maintenance team members and your supplier partners are valuable assets. Working with them empowers them to do their best. Take the time to educate the team and show them how and why being proactive will reduce their workload in the long run.